Please provide an overview of the important stakeholders, key facts, constraints, objectives of management, and a discussion of the accounting issues (including discussion of the appropriateness of the choices made by Bob, identification of alternatives, and supported recommendations). Your discussion with management identified the following issues:

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Bob Heating Supplies Ltd. Bob Heating Supplies Ltd. (Bob) is a Canadian manufacturer of residential and commercial heating and cooling systems. Bob has been in the industry for many years and has been a public company since 2013. The company has had some success over the years but it has been under-performing in the stock market because it has had trouble competing against other, mainly non-Canadian manufacturers. The company is under continuous pressure from its shareholders and creditors about its mediocre performance. In spite of all this, Bob's CEO continues to be optimistic and believes that the company can be the world-wide leader in heating and cooling systems. As a result, senior management has been planning a stock issue to raise capital to expand and upgrade the company's production facilities and launch an extensive marketing program into the Unites State, European, and other international markets. Your firm has been Bob's auditor for many years. It is now January 2021. You are the accountant responsible for the engagement. The manager in-charge of the engagement has asked you to analyze a number of accounting issues. that should have been expensed to date on these assets, $225,000, was fully expensed in 2020, along with the 2020 depreciation. 5. In August 2020, Bob obtained a licence to instal a certain type of specialized heating system for a high-end hotel chain. Bob paid $350,000 to obtain this licence and is entitled to use this heating system for the next five years. Bob has capitalized this amount and decided not to amortize it as he believes that his company will be able to renew the licence at the end of five years. 1. Bob reported net income before unusual or non-recurring items of $1,110,000 for the year ended December 31, 2020. (Not an issue, just an issue statement) 2. During the year, Bob was notified by its lawyers that as a result of new consumer protection legislation responsible for repairing certain problems with residential cooling systems. Bob's management doesn't think that its cooling systems will suffer the types of problems indicated in the legislation but government documentation estimates that, for the number of units Bob has sold in the market it should expect to incur costs of about $560,000 based on company wide estimates. Bob has not accounted for this item in any way. 3. Bob's business with most customers is transacted in cash or on credit cards. Bob offers credit terms to builders and contractors, allowing them up to 90 days to pay. The revenue on these sales is recognized at the time of delivery and providing of the service. However, Bob has also given extended credit terms to a struggling home builder in its community and has agreed to accept payment when the builder sells a home. For this builder, Bob recognizes revenue on sales when cash is collected. As of the end of December 31, 2020, this builder owes $475,000. The costs associated with these sales are $325,000. This revenue has not been recognized and these costs were expensed as incurred. 4. At the beginning of 2020, Bob's management discovered that certain assets purchased several years ago hadn't been depreciated. The amount of depreciation Bob Heating Supplies Ltd. Bob Heating Supplies Ltd. (Bob) is a Canadian manufacturer of residential and commercial heating and cooling systems. Bob has been in the industry for many years and has been a public company since 2013. The company has had some success over the years but it has been under-performing in the stock market because it has had trouble competing against other, mainly non-Canadian manufacturers. The company is under continuous pressure from its shareholders and creditors about its mediocre performance. In spite of all this, Bob's CEO continues to be optimistic and believes that the company can be the world-wide leader in heating and cooling systems. As a result, senior management has been planning a stock issue to raise capital to expand and upgrade the company's production facilities and launch an extensive marketing program into the Unites State, European, and other international markets. Your firm has been Bob's auditor for many years. It is now January 2021. You are the accountant responsible for the engagement. The manager in-charge of the engagement has asked you to analyze a number of accounting issues. that should have been expensed to date on these assets, $225,000, was fully expensed in 2020, along with the 2020 depreciation. 5. In August 2020, Bob obtained a licence to instal a certain type of specialized heating system for a high-end hotel chain. Bob paid $350,000 to obtain this licence and is entitled to use this heating system for the next five years. Bob has capitalized this amount and decided not to amortize it as he believes that his company will be able to renew the licence at the end of five years. 1. Bob reported net income before unusual or non-recurring items of $1,110,000 for the year ended December 31, 2020. (Not an issue, just an issue statement) 2. During the year, Bob was notified by its lawyers that as a result of new consumer protection legislation responsible for repairing certain problems with residential cooling systems. Bob's management doesn't think that its cooling systems will suffer the types of problems indicated in the legislation but government documentation estimates that, for the number of units Bob has sold in the market it should expect to incur costs of about $560,000 based on company wide estimates. Bob has not accounted for this item in any way. 3. Bob's business with most customers is transacted in cash or on credit cards. Bob offers credit terms to builders and contractors, allowing them up to 90 days to pay. The revenue on these sales is recognized at the time of delivery and providing of the service. However, Bob has also given extended credit terms to a struggling home builder in its community and has agreed to accept payment when the builder sells a home. For this builder, Bob recognizes revenue on sales when cash is collected. As of the end of December 31, 2020, this builder owes $475,000. The costs associated with these sales are $325,000. This revenue has not been recognized and these costs were expensed as incurred. 4. At the beginning of 2020, Bob's management discovered that certain assets purchased several years ago hadn't been depreciated. The amount of depreciation